While it may seem to make sense that putting human resource services online in the form of self-service applications will translate into more efficient and effective HR services, less than half of 200 companies surveyed can actually report seeing reductions in HR spending, according to a new study from Towers Perrin, a management and HR consultancy, in New York.
Almost all of the companies—91 percent—use the Web to communicate with employees. Employees can manage some services via self-service Web applications in 48 percent of those companies. But only 40 percent of companies that are using the Web to communicate with employees are seeing reductions in HR costs as a result.
Larger companies (those with more than 50,000 employees) are doing better than the smaller companies (those with less than 10,000 employees.) Forty-eight of large companies as opposed to 38 percent of smaller companies report shrinking HR costs as a result of deploying self-service online applications.
David Rhodes, a Towers Perrin analyst, said in a statement that the payoff for online HR self-service will increase after companies get the user interface right. "While the data definitely show that companies are beginning to reap some of the benefits of Web HR self-service, their actual results arent measuring up to their objectives," he said. "However, this gap can and will narrow as companies focus more on the user experience, the quality and availability of services managers and employees need, and connecting disparate pieces together to simplify use. Its not just about new technologies, but also about content, rethinking how core processes and systems work, and understanding and managing the changes employees will face."
And even though HR budgets for the most part arent yet shrinking much because of Web self-service applications, there are still benefits accruing. Seventy percent of respondents reported improved quality and timeliness of HR services, and 67 percent reported improved employee awareness and appreciation of company-sponsored programs.
Companies faith in there being a payoff down the road for Web self-service HR applications is reflected in the fact that the majority of companies surveyed plan on stepping up investments in the technology. Sixty-five percent said they plan on increasing or accelerating investments in self-service recruiting and hiring applications. Another 68 percent will increase their investments in training applications, and 76 percent will put more money into benefits applications—indeed, benefits ranked as companies No. 1 investment priority.